Muni Bonds vs. HUD Comparison Chart
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Compare tax exempt muni bonds to standard HUD programs and you'll find that our programs offer more options and profit for the developer.
Muni Bonds vs. HUD Comparison Chart
- 1. Tax Exempt Muni Bonds<br />1 Loan for all phases
- 2. Non-profit
- 3. Non-recourse
- 5. Davis-Bacon does not apply
- 6. One source for underwriting and funding
- 7. No advance fees for inspection or per door fees
- 8. 90 - 120 days total time to fund
- 9. 90% LTV (future value, year 5)
- 11. 50% of improved land value as equity, land is debt financed
- 12. 100 % Market Rate Rent
- 14. Term, up to 35 years
- 17. Easy resident migration from phase to phase (SIL/SAL/SNF)
- 18. Simplified marketingAdditional aspects that differentiate each program are also in the relationship between the borrower and the bank. With the bond program, there are two levels of response: the advisor and the bank; there are no added, multiple layers of bureaucratic review and communication. Also, the current equity required by the bank for the bond financing is a worst case scenario. As each deal is subsequently funded and the borrowers performance history is noted, the equity requirement can and will be reduced by favorable historical results. If the project has performed well and there are audited financials for 3 years available, once the call period has been passed, the borrower could seek a lower rate by refinancing the bonds. Although costs for the bonds are higher, when figured against the added fees for inspections and door fees the gap is narrowed considerably. Cash flow analysis reveals more favorable investor returns with bonds vs. HUD funds. <br />HUD <br />2 loans - 1ea. for SIL, SAL
- 20. Non-recourse
- 21. Not relevant
- 23. Multi-level agency approvals for underwriting and funding
- 24. Advance fees and $350 per door fee for underwriting
- 25. Up to 365+ days to fund
- 26. 80% LTC (construction cost)
- 28. 100% of land cost as equity, land is not debt financed
- 30. Rates, between 5.5% - 6%
- 31. Term, up to 40 years
- 32. 3-4% Fee (inc. MIP)
- 34. No contract migration, Each phase has separate contract
- 35. Marketing segregated by phase